Ash Crill alerts us to the news that the United Arab Emirates has announced plans to ban the use of Blackberries, and that Saudi Arabia has announced its intention to do the same. The issue is one we've seen before. The way the Blackberry works is all the data is encrypted and sent through RIM's servers. This pisses off governments who want to spy on the data. RIM, in the past, has noted that it has no way of spying on the email, even if some governments claim to have figured it out anyway (a claim that seems somewhat dubious as that same government later demanded RIM break the encrytpion again). It appears that a lot of folks in the UAE are quite upset about this -- especially as parts of the UAE (Dubai in particular) have spent the last decade plus trying to present themselves as an ideal place for foreign business activity.

NTP, a patent holding firm that is really just a bunch of lawyers with incredibly broad and questionable patents, is at it again. As you probably know, NTP was locked in a long and contentious patent fight with RIM over NTP's claimed patents covering the concept of mobile email. Even as the US Patent Office was telling the world that NTP's patents almost certainly weren't valid, pressure from investors (and the judge in the case who refused to wait for the Patent Office's final rejection of the patents) resulted in RIM settling the case for $612.5 million. For RIM, it became something of a no brainer. Even though its legal position was strong, its investors were killing the company over the uncertainty (there were threats that the judge could issue an injunction shutting down the entire Blackberry network). Settling the case helped RIM's stock price jump up (increasing its market cap more than the cost of the settlement).

But, from a legal perspective, the lawsuit and the end result became the centerpiece of attention for efforts at patent reform. While I still think that the patent reform process in Congress has been misguided and the end result probably a lot more damaging than helpful, many of the politicians involved will point to the RIM-NTP case as evidence of the problems with the patent system. You might think, then, that NTP's investors might sit back and enjoy the spoils of the RIM settlement, but the company quickly went back out and sued all the major mobile operators in the US for violating its patents. However, judges in those other suits said (unlike the judge in the RIM case) that those trials should wait until the Patent Office has made a final decision on the validity of NTP's ridiculously overbroad patents.

However, NTP is not waiting around. It's now suing again. This time, rather than the mobile operators, it's going after device makers and platform vendors, suing Apple, Google, Microsoft, HTC, LG and Motorola. Basically, it appears that NTP has decided that if anyone does email on a phone, they have to pay NTP.

There might not be a better example of how incredibly screwed up the patent system is than this. NTP was involved in an attempt to do mobile email ages ago (and it wasn't the first actually... but NTP paid off some folks who had prior art). The idea itself wasn't new or all that innovative, and the timing was off, so NTP failed. In a functioning free market, that's a good thing. If a company can't execute, it should fail. Unfortunately, thanks to a ridiculously overbroad patent award, NTP has been able to live on as a bunch of lawyers suing any company that does figure out how to execute.

Perhaps the only good thing coming out of this is that it may help draw more attention to just how broken the patent system is.

With the news coming out that the US International Trade Commission (ITC) has agreed to investigate both RIM and Apple over patent claims brought by Kodak, it makes you wonder if we'll soon be able to have any smartphones at all. As you hopefully know the ITC process is a sneaky loophole used by patent holders to get two totally unrelated shots at putting the same company on trial for infringing on the same patents. There's the regular court process, and then there's the ITC, who can't fine companies, but can issue injunctions barring the import of the products. This process is regularly abused for anti-competitive purposes. Of course, there are other, similar charges that the ITC is reviewing as well, and it begins to make you wonder if any smartphone can actually "survive" this process.

Pretty much all smartphones are made outside of the US, so they can all be barred by the ITC, and with the technology in your average smartphone being covered by hundreds of patents, it's almost certain that every smartphone infringes on a slew of patents. Obviously, it's unlikely that anything will ever result in a full import ban on any particular phone -- the second that happened, the company would just give up and pay a ton of cash to make the complaining company go away -- but it does highlight what a wasteful process this is, and how it's taking good money away from actual innovation in smartphones and having it go towards stunts like this.

The patent battle between RIM and NTP is considered something of landmark in alerting politicians and the general public to just how ridiculous the patent situation is these days. There was, however, an interesting sidenote on this. As part of its attempt to show that its own patents were valid, NTP convinced a couple other companies to "license" the patents -- except the details showed that NTP "invested" in each of these companies at the same time. That certainly looks like NTP paying a company to license its patents, just to make it looks like there were some legitimate licensees. Two of the companies that NTP did this with were Visto and Good Technology. Having licensed NTP's patents, Visto, at least, took a lesson from NTP and became an aggressive player in the patent lawsuit game, trying to mimic NTP's success by suing RIM as well.

There is no way to describe this other than sour grapes. Visto tried to play in the market and was a pretty big (and massively expensive) failure. RIM, on the other hand, was able to create a product that people wanted and build a good business on it. This wasn't by copying Visto's (or NTP's) ideas, but better understanding the actual market and creating a good product itself. Visto failed to do that. So, in turn, it just sued and demanded cash from the company that was able to innovate. Recently, Visto also purchased Good Technology (another NTP licensee) from Motorola (who had purchased it earlier), likely adding more patents to the portfolio.

Either way, it looks like RIM has finally grown tired of the game and has agreed to pay Visto $267.5 million. It's less than the amount NTP got, but it's still a hefty chunk of change. And, for what? For being the loser in the market place. This is a tax on innovation. The loser in the marketplace forces the winner to hand over a nice chunk of profits. It's bad for everyone (except some lawyers and Visto shareholders).

We already think that noncompete agreements don't make sense for companies, but Motorola may be taking the concept to a new level. Rather than trying to stop employees from leaving Motorola to go to a competitor, it's now trying to stop employees it already laid off from going to work for RIM. Motorola had already sued RIM earlier this year for trying to entice employees to jump ship, and this followed another suit by Motorola against Apple for hiring away an exec. Maybe rather than trying to prevent employees from going elsewhere, Motorola might want to focus on improving its own offerings and its own working conditions so that this isn't even a problem? But if it's laying people off, it seems rather ridiculous to then try to stop them from joining another company.

So, the economy is collapsing, consumer spending is way down, banks and auto companies are on the verge of going out of business, unemployment is up, foreclosures are up, and some might have you believe that we're heading back to Great Depression style bread and soup lines. Luckily, it looks like we're not quite there yet, as plenty of folks seemed willing to line up, not for some free grub, but to get the latest hot new phone, the Blackberry Storm. Apparently, we haven't quite entered Great Depression territory yet.

While most people think of just the NTP lawsuit when they hear about RIM and patent infringement troubles, what's often left out of the discussion is that prior to the NTP suit, RIM was one of the more aggressive companies in filing patent infringement lawsuits against everyone else. In fact, it was news articles about RIM's aggressive patent enforcement strategy that convinced the guys behind NTP to file their lawsuit in the first place. Since paying $612.5 million to NTP to settle that battle, other patent holders have been lining up to sue RIM as well.

Earlier this year, we wrote about another aggressive patent enforcer, Wi-LAN, which sued RIM for infringement. RIM, once again, settled -- indicating a bit of an open season. If you happen to have a patent that RIM might sorta possibly infringe on, why not sue?

The latest to step up to bat is Mformation, who has sued RIM for two separate patents which are both about remote management of a wireless device (Patent 1 and Patent 2). Whatever the merits of the case, all of this has to make you wonder if RIM regrets its decision to kick off the process of suing lots of companies for patent infringement. It seems that the blowback was a lot worse than any benefit.

As a company, if things aren't going well, it's often difficult to accept that some of the blame may be on your end -- which makes it especially easy to lash out at competitors, assigning blame to them. This becomes troublesome when it starts to involve lawsuits. Just a couple months ago, we noted that Motorola was suing a former exec for jumping ship to Apple. And, now the company is suing RIM for getting a bunch of Motorola employees to leave Motorola and join RIM. To any outsider, it seems clear that Motorola has some problems that make it so employees are tempted to jump to other companies. But rather than focus on figuring out how to fix that, and make things such that employees want to stick around (making cooler phones might be a good place to start), it's lashing out at competitors who are more appealing to Motorola's own employees. In the meantime, Motorola might want to check out the research that shows the free flow of employees between competitors helps spread innovation across the entire market. In other words, stop suing people because your employees are leaving, and start figuring out ways to make employees want to work for you.

Wi-LAN is a Canadian company that did some early work in the wireless field, but was unable to actually make much of a business out of its work, so it took the loser's route: it started suing lots of companies for patent infringement. It's the same old story: winners innovate, losers litigate -- and litigate seems to be about all that Wi-LAN does these days. Recently, Wi-LAN targeted RIM, another Canadian company, who famously was pressured to cough up hundreds of millions in another patent battle to NTP a few years ago. These days, RIM seems to have learned an unfortunate lesson: it's easier to just pay up whoever sues you for patent infringement, no matter how legit (or not) their claim is.

So, it should come as no surprise that RIM has agreed to pay off Wi-LAN to make the lawsuit go away. No details were released, but given that Wi-LAN put out a separate press release saying that its "earnings" (a misnomer if there ever were one) for the quarter should be between $24.5 million and $25.5 million from the previous guidance of $15 million to $20 million you can take a guess how much this cost RIM. Definitely cheaper than a lawsuit, though this will only encourage two bad results: Wi-LAN will keep suing companies that actually do something, and more companies with questionable patents on wireless technologies will line up to get some cash from RIM. This isn't encouraging innovation. It's encouraging extortion.

Turns out that Canadian patent holders love East Texas just as much as American companies. The news today covers how Canadian wireless patent holder Wi-LAN has now sued RIM in East Texas, concerning patents on mobile handheld devices. RIM is also a Canadian company (and also heavily involved in patent disputes). Isn't it great to see two Canadian firms choosing East Texas as the best place to fight over patents?

Wi-LAN is a company that we've discussed in the past. It worked on some technologies for wireless networks, but was unable to successfully market products commercially. In other words, it failed in the market. So, instead, it started focusing on aggressively enforcing its patent portfolio, suing a ton of companies who did anything wirelessly. As with so many public companies that turn into patent hoarders these days, it also has a very vocal and active set of day traders who will defend it to no end (see the comments on that link above).

RIM, of course, is also a well known company that we've written about many times. The maker of the super popular Blackberry wireless device, it became an aggressive filer of patent infringement lawsuits. That, in turn, led some patent holders from a non-practicing entity called NTP to sue RIM over some other patents -- eventually leading to a $612.5 million payout by RIM (despite the fact that NTP's patents were found to be invalid).

This latest case seems like it ties together so many different stories. You've got a failed business trying to use its patents to hold back the company that won; it's got Wi-LAN who has been aggressively trying to tax just about every wireless innovation with its patents; it's got RIM, who has been on both sides of a ton of questionable patent lawsuits; and it all takes place in East Texas. Who could ask for anything more?